The factories in the Philippines that make clothes for export have not benefited from the ongoing Sino-US trade war, as the companies looking for alternative manufacturing sites tend to choose Myanmar over the Philippines, an industry group said.

This is according to the Confederation of Wearable Exports of the Philippines (Conwep), whose factories make clothes for international brands such as Polo and Fossil.

Its data showed that the sector’s exports dropped four per cent from January to July this year to $542 million, compared to the same period a year ago.

Last year, exports of the local apparel industry dropped 16 per cent to $927 million, after flat growth the year before.

The sector was expected to grow 10 to 20 per cent last year.

This year, the group was expecting 15-20 per cent growth from the trade war, as global companies aimed to set up shop in parts of Southeast Asia instead of China to avoid being a casualty of the growing tensions.

But the expected transfer of manufacturing sites to the Philippines has not happened.

“If we’re seeing the same trend, I think [we’d see] continuous decline. [We’re] not enjoying the trade war. That’s a very big sign. Why is there no growth?” Conwep executive director Maritess Jocson-Agoncillo said.

The group employs 60 per cent of the apparel industry’s 180,000 workers, who are in factories mainly located in economic zones.

Even then, these workers are still paid more than their counterparts in Southeast Asia.

The monthly wage of an apparel factory worker in Myanmar working eight hours per day costs $85 to $95.

Vietnam and Cambodia have relatively higher monthly wages at $146 to $167, and $147 to $170, respectively, Conwep data showed.

The same worker in the Philippines, meanwhile, has a monthly average of $190 to $274.

Cushioning the impact of the high cost of doing business in the country are the current tax incentives, she said.

Conwep presented the figures in a roundtable discussion earlier this week with other industry groups that would be affected by the Comprehensive Income Tax and Incentive Rationalisation Act.

The bill seeks to lower the corporate income tax, which is currently one of the highest in Southeast Asia.

But it has drawn a lot of criticism because it will also mean the rationalisation of tax incentives, which critics fear will lead to job losses after companies fail to cope with the rising cost of doing business.

Conwep estimates over 110,000 workers – in the apparel, textile, travel goods and footwear industries – will be displaced in 12 to 18 months once the bill is passed.

The group is asking for a grandfather rule, whereby the bill will only apply to incoming firms but exempt existing companies.

“The cost of doing business is already very tough on us, and then now you have this,” she said.

PHILIPPINE DAILY INQUIRER/ANN